Kingsoft Office(SH:688111) Caixin Securities·2024-03-27 16:00Investment Rating - The report maintains a "Buy" rating for the company [4]. Core Insights - The company is a leading domestic office software provider, benefiting from the rise of AIGC (Artificial Intelligence Generated Content) [2][11]. - In 2023, the company achieved a revenue of 4.556 billion yuan, a year-on-year increase of 17.27%, with a CAGR of 34.98% from 2017 to 2023 [2][19]. - The net profit attributable to shareholders was 1.318 billion yuan, up 17.92% year-on-year, with a CAGR of 35.35% from 2017 to 2023 [2][19]. - The gross margin was 85.30%, an increase of 0.30 percentage points year-on-year, while the net margin was 28.85%, a decrease of 0.26 percentage points [2][29]. Summary by Sections Company Overview - The company has undergone a deep transformation towards cloud office solutions and is actively exploring AIGC applications [11]. - Its core products include WPS Office, Kingsoft Document, and a digital office platform [14]. Business Model - The company operates through personal subscriptions, institutional subscriptions, and institutional licensing [17]. - Personal subscription revenue reached 2.653 billion yuan in 2023, growing 29.42% year-on-year, while institutional subscription revenue was 0.957 billion yuan, up 38.36% [22]. Financial Analysis - The company’s total revenue for 2023 was 4.556 billion yuan, with a breakdown showing personal subscription revenue at 2.653 billion yuan, institutional subscription at 0.957 billion yuan, licensing at 0.655 billion yuan, and advertising at 0.288 billion yuan [22][24]. - The company’s contract liabilities reached 1.892 billion yuan by the end of 2023, a year-on-year increase of 9.30% [26]. Market Position and Competitive Advantage - The office software industry has high technical barriers, with Microsoft’s MS Office being the main competitor [2][37]. - WPS Office has differentiated itself through personalized features, better mobile experiences, and flexible pricing strategies [2]. Future Outlook - The company anticipates significant growth in both personal and institutional subscription markets, with projections indicating a potential market size reaching hundreds of billions [6][11]. - The introduction of WPS AI is expected to enhance product offerings and drive revenue growth [7].